DEVELOPING NEW WAVE MARKETING INITIATIVES TO OPTIMIZE BANCASSURANCE DISTRIBUTION CHANNEL IN DIGITAL ERA (CASE STUDY: PT ABL)

• Main Author: Saputra, Ahmad
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/35526
• Institution: Institut Teknologi Bandung

The demand for life insurance protection in Indonesia has been steadily increasing in recent years, judging from the increasing values of the total insurance gross premiums and the insurance density. This is driven by the rapid urbanization of the rising middle-class consumers in Indonesia. With stronger purchasing power, this consuming class possess the capability to spend on discretionary items and also look for services to protect their increasing wealth. This has led to higher demand of goods and services, including financial services such as banking, investments, and insurance protection. However, despite having high population, the index of financial literacy and financial inclusion in Indonesia is still relatively low. This shows that the level of awareness and participation of the population on financial products and services are still lacking. Thus, despite having increasing demand of life insurance protection, the level of insurance penetration in the country is still low. Therefore, life insurance companies need to be more innovative in developing their products and services. This includes developing distribution channels that can help them to penetrate the market further. One of them is through the development of bancassurance distribution channel. Bancassurance is a business model that enables insurance companies to sell their insurance products through their partnered bank distribution channels. PT ABL, a subsidiary of one of the state-owned banks in Indonesia, also focuses on the development of its bancassurance distribution channel since the channel has contributed to a significant premium growth of the company, compared to the contribution of other distribution channels that the company has. However, PT ABL itself is not a dominant player in the domestic life insurance market. In 2016, its market share is below two percent of the total premium in the life insurance market. Thus, PT ABL aims to optimize its bancassurance premium contribution further, by leveraging on the large customer base and the wide distribution network of the parent company. Adapting to the dynamics of digital economy, PT ABL is also moving towards digitalization in order to improve its business processes and to enhance its customer service through the development of technology-based services. The objective of this research is to develop marketing initiatives that can be implemented by PT ABL to optimize its bancassurance distribution channel in the digital era. Prior to developing the recommended solution, the author analyzes the external and internal environment of the business, to understand the current business condition and challenges faced by the company. For the external analysis, the author uses Kotler’s anatomy of change and Porter’s five forces framework. And for the internal analysis, the author uses the STP and marketing mix 4P’s framework. In the analysis, the author uses both qualitative and quantitative data obtained from interviews, surveys, observation, literatures and other data sources. In this research, the author uses purposive sampling method. For primary data, the author conducts interviews with internal respondents and also distributes a survey to external respondents (banking customers) to gain insights on customer behavior and purchase-decision factors for life insurance products. The survey result shows that the three major factors that can positively drive the purchase decision on life insurance products are the customer service quality, the brand image and the premium price. In developing the marketing initiatives, the author uses a combination of new wave marketing and marketing 4.0 frameworks. The author believes that the frameworks fit to address the challenges faced in the current era of connectivity, where there have been shifts in both customer behavior and customer path. The new wave marketing concept approaches these changes with a human-centric marketing, while marketing 4.0 focuses on the integration between online and offline channels, leveraging the digitalization to increase the productivity and the human-centric approach to establish customer engagement. The proposed marketing initiatives are developed in accordance to the shift in the customer path. It focuses on improving customer experiences across the customer path, by creating more brand attraction, triggering curiosity in the local communities, securing the customer’s commitment, and building affinity with the customers. In summary, in order to optimize the bancassurance distribution channel and increase the market share of the company, PT ABL need to increase its brand awareness and improve the customer service quality, by creating unique differentiation as the largest digital micro-insurance provider in Indonesia who can deliver seamless digital customer experiences across the whole customer value chain.